Critical business functions: What you need to know to thrive in 2021
There is lots to do when running a business. Some of these business functions can be so critical to your success that, if you don’t do them well, they can impact on the health of your business. Some of these tasks need to be done daily. Others less frequently. Whatever the frequency, it is vital that you pay attention to these critical business functions to ensure your business thrives in 2021 and beyond.
1. Understand your strengths and weaknesses
2. 11 Critical Business Functions
3. Questions to ask yourself
4. A warning
5. Business Strategy, Business model and planning
8. Your product or service
9. Systems and processes
11. Health and safety
12. Compliance with regulations
13. Business Operations
16. Other business functions
Understand your strengths and weaknesses
For any business venture to be successful, a lot of stuff needs to go right. In the early days, much of that success is going to be down to you. So it makes sense to understand your strengths and weaknesses in the context of the characteristics required to succeed. When considering your strengths and weaknesses, it’s crucial to understand the things you’ll need to do if you start a business. You will be competent at some of them. And perhaps not so good at others.
11 Critical Business Functions
We’ve put together a list of 11 critical business functions that a typical business owner needs to do. Some of them are obvious. Some less so. All need to be done at some point. They also need to be done well because, if they are not, they have the potential to cause issues for you, the business owner. Some of the functions or tasks we’ve listed may not apply to the same degree for each business. After all, every business is different. That said, it is likely that all business owners who attain some level of longevity and success will need to deal with these at some stage.
Questions to ask yourself
The 11 critical business functions are important if your goal is to build a strong business. We’re assuming, of course, that no one listening is contemplating going into business to fail. As we go through them, ask yourself
- Can I do that?
- Am I good at it?
- Will I have time to learn how to do it myself?
If you do decide to do all of these yourself, it will come at a cost somewhere. Think back to your self-assessments from Episode 2 You-360. Would working 18 hours a day fit with you and your family’s life? Getting bogged down with business administration is a very common problem amongst small business owners. You may need to get some help along the way. The best way is to build your support team. So, here they are, the 11 critical business functions that need to be done to ensure business success
#1 Business Strategy, Business model and planning
- working out your business model
- writing a business plan
- deciding how you are going to grow and sustain the business
- what’s the best legal structure for your business?
- protecting your intellectual property
- goal setting
How much do you know about these things? How long will they take? Will you need external help?
Most businesses need to have a way of letting potential customers know that they exist. In business we tend to do that via some form of marketing. So, what do you know about marketing? How effective will you be as a marketer?
- What’s your brand message, style, tone of voice and market positioning?
- what forms of marketing will work best for your business and who is your target market?
- who is going to design and run the marketing campaigns?
Oh no! Not selling! Yep, I’m afraid so. Most businesses need to be actively pursuing sales to survive. You’ll need to consider things like;
- What is your process to convert a lead into a sale?
- will you use digital sales funnels?
- do you need a customer relationship management (CRM) system?
- How much will it cost to get a customer?
- What will your pricing strategy be?
- will you offer discounts?
#4 Your product or service
Your product or service is pretty important. Hopefully, you’ve created it to meet a genuine need you’ve identified within your target market. But it usually doesn’t stop there. Have a think about things like;
- How will you continue to innovate to keep ahead of customer expectation and your competitors?
- Will you continue to develop new product ideas?
- How will you manage warranty periods and customer support?
- Managing your purchasing from suppliers, agreements etc.
#5 Systems and processes
Even if they are terrible, every business has a set of systems and processes. In order to succeed over the long term, you’ll need to improve them on a continuous basis. How will you improve yours?
If things go well, you may have to employ staff to allow your business to grow. As any business owner will tell you, things start to get interesting when you become an employer. How will you;
- Recruit, retain and motivate your employees or contractors
- Keep on top of the employment law
- manage the staff
- build a great culture
- onboard, train and educate your staff
#7 Health and safety
If you are fortunate enough to build your business to a size whereby you need to employ others, you’ll also be responsible for looking after their wellbeing. Do you know what your responsibilities are? How will you stay healthy with limited time available?
#8 Compliance with regulations
On top of everything else you need to think about when running a business, you also need to be across the rules and regulations that apply to it.
- Do you need a licence to operate?
- Do you need a Certificate of competency to operate your business?
- What record keeping do you need to demonstrate compliance?
- Are you aware of all the regulations that apply to your type of business or your industry?
#9 Business Operations
All of the actions that you or your people perform in the course of running the business can be described as the operations. In all but the very tiniest of businesses, there can be lots of moving parts. If those moving parts don’t work well together, chances are producing your product or service will cost you more than it should. And that can spell trouble for your business.
- do you know how to measure the operations part of your business.
- do you know how to improve your operations?
- how will you manage all of these tasks?
Managing the finances of a growing small business can be particularly challenging. There is a lot to know and getting help in this area can be expensive. Many business owners try to look after their business’ finances on their own. Some will ask their partner to do it. If you get the finances wrong, however, there can be some significant impacts on the business down the track. Your attitude to money is a key factor in business growth.
One thing very few new businesses spend much time thinking about is risk. Unfortunately, the area of risk management is only getting more difficult to manage. 20 years ago we didn’t need to worry too much about identity theft or hacking. Today, however, they are front of mind for many business owners.
Other business functions
Of course, that isn’t necessarily all there is. The above is a fairly generic list. You business may require you to complete a longer list of tasks and funtions that this. You need to understand that juggling a dozen balls every day is the norm and, don’t think for a second that things don’t regularly go wrong. Unexpected issues will crop up like staff getting sick, suppliers being late, deliveries going missing. As the business owner, you’ve got to deal with these things and with them well.